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Lexus Granito (India) Ltd.

BSE: 535001 Sector: Consumer
NSE: LEXUS ISIN Code: INE500X01013
BSE 05:30 | 01 Jan Lexus Granito (India) Ltd
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Lexus Granito (India) Ltd. (LEXUS) - Director Report

Company director report

Dear Shareholders

The Directors of your Company with immense pleasure presenting the 12thAnnual Report on the business and operation of the company together with Audited FinancialStatements of Accounts and the Auditors Report of your Company for the Financial Yearended on 31st March 2020.

FINANCIAL HIGHLIGHTS

The Company's financial performance for the year ended 31st March 2020 issummarized below:

(Amount in cr.)

PARTICULARS

STANDALONE

31.03.2020 31.03.2019
Sales/lncome from Business operations (Gross) 100.65 134.78
Less: Excise Duty - -
Net Sales 100.65 134.78
Other Income 3.05 5.86
Total Revenue 103.70 140.64
Less: Total Expenses 104.81 140.11
Profit/(Loss) before Tax (1.11) 0.52
Less: Current tax expense for current year 0.59 1.39
Less: Deferred tax 0.17 (1.19)
Less: MAT Credit Entitlement - -
Less: Earlier Year - -
Net Profit/ (Loss) after Tax for the year (1.87) 0.33
Earnings per share (Basic) (0.97) 0.17
Earnings per share (Diluted) (0.97) 0.17

STATE OF COMPANY'S AFFAIRS

BUSINESS OPERATIONS

The company is operating at Morbi which is hub of production of Ceramic tiles inIndia. Almost 95% of total production of tiles is done in this part. The company is majorplayer in this region. The company has two dedicated kiln for the production of vitrifiedtiles and one kiln for manufacturing of Wall tiles.

Ceramic tiles have become necessities of every household. Company's current businessmodel is manufacturing and exporting the tiles in India as well as in InternationalMarkets. Housing sector is going to be the booster for tile industry. According toexpert's analysis in the tile industry the housing sector is at a tipping point and willbe the economy's next big growth driver.

Brief details of company infrastructure and other details is as under

• The Company is engaged in manufacturing dealing and marketing of vitrifiedfloor ceramic tiles and wall tilescatering domestic and international markets

• Exporting to nearly 18 countries-West Indies Columbia Uzbekistan IraqIsrael Italy Kosovo Lebanon Nepal South Korea Egypt Australia GCC CountriesMexico U.S.A. Vietnam etc.

• The manufacturing facility is spread over 4 hectares

• It is well equipped with requisite plant and machineries along with otherfacilities

• Presently we have 92 employees at our manufacturing facility and registeredoffice.

• Two Star Export House by the Directorate General of Foreign Trade

• Quality system of manufactured product is ISO 9001:2008 certified

• The company was awarded by Rising Stars at Power Brands Global LondonInternational Forum for Equality.

Our Company has been operating in both domestic and international markets. Our revenuefrom domestic and export operations contributed 67.75 % and 32.25% respectively of ourtotal revenue from operations for the year ended March 31 2020.During FY 2019-20 weexported our products to various countries such as West Indies Columbia UzbekistanIraq Israel Italy Kosovo Lebanon Nepal South Korea Egypt Australia GCC CountriesMexico U.S.A. Vietnam. We intend to continue to mark a presence in global markets in ourindustry by supplying innovative products at competitive prices.

FINANCIAL PERFORMANCE

Our total revenue is Rs. 10 370.48 lakhs in FY 2019-20 as compared to Rs. 14063.60lakhs in FY 2018-19. The sales of our company declined in the current financial year dueto low demand in housing sector and most of the building projects in India are atstandstill due to lack of adequate funds and buyers in the market. Company also sufferedthe shortage of working capital.

Due to several challenges faced by the company such as acute liquidity positiondelayed payment from customers and working capital shortage lead to profit/(Loss) aftertax of Rs. (186.84) lakhs in F.Y. 2019-20as compared to Rs. 33.32 lakhs in F.Y. 2018-19.During the year company rating by the rating agencies also declined due to default inpayment of interest and timely repayments of debts taken. Overall this was very bad yearfor the company both in profits and sales.

Your management is striving hard to address all the issues coming in the company and isconfident that new strategies now being pursued by the company to focus on low cost tilesis appropriate for achieving the desired result. Considering the brand equity enjoyed bythe company and the performance of the company during the year in a tough environment andseveral steps taken for improving the performance of the company the management thereforebelieves it is appropriate to prepare the financial statements on going concern basis.The company has also improved its working capital shortage in the financial year topurchase raw materials at cheaper prices and advances credit to its buyers by takinginterest free unsecured loans from the promoters and directors of the company amounting toRs. 9 crores in the month of February in 2020. This will help in improving the liquiditypositions. Now the company plant is running at optimum levels and your directors arehopeful for better performance in the coming years and also look after that not to repeatagain.

TRANSFER TO RESERVES

The board of Directors of the company has not transferred any amount to its Reserve& Surplus during the Financial Year 2019-20.

DIVIDEND

No Dividend has been declared by the company for the year ended March 31 2020 with afuturistic approach to retain the earnings in the business for expansion from internalaccrual for the growth of the company.

CHANGE IN THE NATURE OF BUSINESS

During the year under review there was no change in the nature of business of thecompany.

CHANGES IN BOARD OF DIRECTORS AND KMP DURING THE YEAR

APPOINTMENT:

The Board of Directors inform the members of the Company that the appointment of theboard of directors took place under the provisions of Section 161 and applicableprovisions of Companies Act 2013 which is as follows:

1. Mr. Jitendrabhai Chandulal Lakhtariya was appointed as Additional IndependentDirector in the Board w.e.f February 05 2019 and has been appointed as IndependentDirector in the Annual General Meeting held on September 28 2019 for a term of 5 yearsw.e.f February 05 2019.

2. Mr. Rakesh Jayantilal Amrutiya was appointed as Additional Independent Director inthe Board w.e.f April 23 2019 and has been appointed as Independent Director in theAnnual General Meeting held on September 28 2019 for a term of 5 years w.e.f April 232019.

3. Mr. Sagarbhai Rasikbhai Jasani was appointed as Additional Independent Non-ExecutiveDirector of the company on the Board w.e.f. November 26 2019.His tenure will expire atthe ensuing Annual General Meeting; the Board of Directors has recommended his appointmentas Independent Directors of the Company to the members in the ensuing AGM.

RESIGNATION:

The Board of Directors inform the members of the Company that the resignation of theboard of directors took place under the provisions of Section 168 and applicableprovisions of Companies Act 2013 which is as follows:

1. Mr. Yagneshkumar Ramjibhai Adroja has resigned from the post of Non-ExecutiveIndependent Director of the company on the Board w.e.f. November 26 2019 on personalgrounds. Mr. Yagneshkumar has made a remarkable contribution for the sustainable growthand success of the company. Strategic direction and support extended by him through allthe phases the company would always be reminisced at all the times.

COST AUDIT

The provision of section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 and Rule 14 of the Companies (Audit and Auditor) Rules2014 are not applicable to the Company.

SHARE CAPITAL AND OTHER CHANGES

During the Financial Year 2019-20 there are no changes in the Company took place asstated below: -

1 Authorized Share Capital

As on date of this report the Authorised Share Capital of the company is Rs. 22.00Crores divided into 22000000 equity shares of Rs. 10 each.

2 Preferential Issue

During the Financial Year no shares were issued under any Preferential Issue.

3 Right Issue

During the year company has not increased its issued and paid-up Equity Share Capitalby making any right issue of shares.

A Bonus Issue

During the Financial Year no shares were issued to existing shareholders as BonusShares under any Bonus Issue.

5 Issue of Equity Shares with Differential Rights

Company does not have Equity Shares with differential rights and have not issued anyshares with differential rights during the financial year 2019-20.

6 Issue of Sweat Equity Shares

During the Financial Year no shares were issued as Sweat Equity Shares under anyScheme.

7 Issue of Employee Stock Options

During the Financial Year no shares were issued under any Scheme of Employee StockOption.

8 Provision of money by company for purchase of its own shares by employees or bytrustees for the benefit of employees

There was no provision made of the money by the company for purchase of its own sharesby employees or by trustees for the benefit of employees or by trustees for the benefit ofemployees.

9 Splitting/Sub Division of shares

No splitting/ sub division of shares was done during the financial year 2019-20.

i Further Issue of Shares Through Initial Public Offer and Listing of Shares

No further issue of shares was done during the financial year 2019-20.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection fund (IEPF).

DEPOSITS

Company has complied with section 73 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 and there is no outstanding deposit due forre-payment. Hence the requirement of furnishing the details of the deposits which are notin compliance with chapter V of the Act is not applicable.

SUBSIDIARIES. JOINT VENTURES AND ASSOCIATES

The Company has no Subsidiaries and Joint Ventures and Associates as on the year ended31st March 2020.

REGISTRAR & SHARE TRANSFER AGENTS

The Company has appointed M/s Big Share Services Private Limited as its Registrar &Share Transfer Agent.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis on matters related to the business performance asstipulated in the SEBI (LODR) Regulations 2015 is given as a separate section in theBoard Report as Annexure-VIII.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Composition of Board of Directors

The Board of Directors of Lexus Granito (India) Limited is a balanced one with anoptimum mix of Executive and Non-Executive Directors. They show active participation atthe board and committee meetings which enhances the transparency and adds value to theirdecision making. The Board of the Company is headed by an Executive Chairman. Chairmantakes the strategic decisions frames the policy guidelines and extends wholeheartedsupport to Executive Directors business heads and associates.

As on 31st March 2020 The Board of company consists of Eight (8)Directors. The composition and category of Directors is as follows:

Category Name of Directors DIN
Chairman and Whole time Director Mr. Babulal Mahadevbhai Detroja 01725541
Managing Director Mr. Anilkumar Babulal Detroja 03078203
Whole time Director Mr. Nilesh Babubhai Detroja 01725545
Whole time Director Mr. Hitesh Babulal Detroja 02760273
Whole time Director Ms. Parulben Nileshbhai Detroja 02760294
Independent Director Mr. Rakesh Jayantilal Amrutiya 08421454
Independent Director Mr. Jitendrabhai Chandulal Lakhtariya 08344782
Additional Independent Director Mr. Sagarbhai Rasikbhai Jasani 08604418

Independent Directors

The Board of Directors of the Company informs the shareholders of the Company about thechanges in the composition of the board of Directors of the company during the FinancialYear 2019-20 as follows:

Mr. Jitendrabhai Chandulal Lakhtariya and Mr. Rakesh JayantilaI Amrutiya were appointedas Additional Independent director w.e.f. 5th Feb 2019 and w.e.f. 23.04.2019respectively on the board and were appointed as Independent Director in the Annual GeneralMeeting held on 28th September 2019 by the members of the company.Accordingly requisite resolutions were passed for their appointment as IndependentDirectors.

Further Mr. Sagarbhai Rasikbhai Jasani was appointed as Additional IndependentNon-Executive Director of the company on the Board w.e.f. November 26 2019. His tenurewill expire at the ensuing Annual General Meeting; the Board of Directors has recommendedhis appointment as Independent Directors of the Company to the members in the ensuing AGM.

Further sub-section (13) of Section 149 provides that the provisions of retirement byrotation as defined in subsections (6) and (7) of Section 152 of the Companies Act 2013shall not apply to such Independent Directors. Hence none of the Independent Directorsretire at the ensuing AGMs.

CFO CS and Managing Director (KMP)

Mr. Dilipbhai N Fultariya was appointed as the Chief Financial Officer (CFO) of thecompany w.e.f04th May 2017 as per the provisions of the Companies Act 2013. He handles thefinance and accounts of the company and is associated with the company since last sevenyears.

Mr. Anilkumar Babulal Detroja was appointed as Managing director on the board w.e.f 04thMay 2017 for a term of five years and has been handling the management of the companyutmost efficiency.

Ms. Kirti Goyal M.No. 60867 has been appointed as Company Secretary-cum-ComplianceOfficer of the company with effect from 17th January 2020. She replaced Mrs.Payal Jain from this post. Board would like to thanks Mrs. Payal Jain for her services tothe company as Compliance Officer.

Appointment of Whole -Time Director

Mr. Babulal Mahadevbhai Detroja Mr. Niles Babubhai Detroja Mr. Hitesh Babulal Detrojaand Mrs. Parulben Nileshbhai Detroja were appointed as the Whole-time Directors of thecompany on the Board w.e.f. 04th May 2017 for a term of five years under theprovisions of section 196203 and applicable provisions of the Companies Act 2013.

Directors Liable to retire by rotation and be eligible to get Re-Appointed

Pursuant to the provisions of section 152(6) and other applicable provisions of theCompanies Act 2013 Mr. Nileshbhai Babubhai Detroja though appointed as a Whole TimeDirector on the board w.e.f 04th May 2017 for a term of five years has beenassociated with the company as director since 02nd August 2010 is liable toretire by rotation at the ensuing 12th AGM and being eligible to get re-appointed asWhole Time Director of the company in the ensuing AGM of the company. Accordinglyrequisite resolution shall form part of the Notice convening the AGM.

MEETINGS OF INDEPENDENT DIRECTORS

In Compliance with the Companies Act 2013 and SEBI (Listing Obligations andRegulations) Requirement 2015; the Independent Directors Meeting of the Company was heldon 13.12.2019 and 12.03.2020 Independent Directors Meeting considered the performance ofNon-Independent Directors and Board as whole reviewed the performance of Chairman of theCompany taking into account the views of Executive Directors and Non-Executive Directorsand assessed the quality quantity and timeliness of flow of information between theCompany Management and the Board.

Whenever any new Independent Director is appointed he/she is made familiar to thebusiness and its operations and also about his role and duties throughpresentations/programmes by Chairman Managing Director and Senior Management.

Pursuant to Clause VII of the Schedule IV of the Companies Act 2013 and Regulation 25of Listing Regulations the Independent Directors of the Company are required to hold atleast one meeting in a year without the attendance of NonIndependent Directors and Membersof Management. All the Independent Directors of the Company shall strive to be present atsuch meeting.

All Independent Directors were present at the meetings of Independent Directors held on12.12.2019.

Name of the Member Position Status
Mr. Jitendrabhai Chandulal Lakhtariya Chairman Non-Executive Independent Director
Mr. Rakesh Jayantilal Amrutiya Member Non-Executive Independent Director
Mr. Sagarbhai Rasikbhai Jasani Member Non-Executive Independent Director

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have confirmed to the Board that they meet the criteriaof independence as specified under Section149(6) of the Act and that they qualify to beindependent directors pursuant to the Rule 5 of the Companies (Appointment andQualification of Directors) Rules 2014. They have also confirmed that they meet therequirements of 'Independent Director' as mentioned under Regulation 16(1)(b) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

The confirmations were placed before and noted by the Board.

MEETINGS OF THE BOARD OF DIRECTORS

The Board meets at regular intervals to discuss and take a view on the Company'spolicies and strategy apart from other Board matters. The notice for the board meetings isgiven well in advance to all the Directors.

During the year the Board of Directors met nine times and board meetings were held onthe following dates as mentioned in the table:

Sr. No. Date of Meeting Board Strength No. of Directors Present
1 10.06.2019 8 8
2 24.06.2019 8 8
3 28.06.2019 8 8
4 26.07.2019 8 8
5 24.08.2019 8 8
6 30.09.2019 8 8
7 14.11.2019 8 8
8 26.11.2019 8 8
9 17.01.2020 8 8

Frequency and Quorum at these Meetings were in conformity with the provisions of thecompanies Act 2013 and the "Listing Regulation" and the listing agreementsentered into by the company with the Stock Exchange. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013 and SEBI (LODR)Regulations 2015.

DIRECTORS APPOINTMENT REMUNERATION AND ANNUAL EVALUATION

The Company has devised a Policy for Directors; appointment and remuneration includingcriteria for determining qualifications performance evaluation and other matters ofIndependent Directors Board Committees and other individual Directors which includecriteria for performance evaluation of both non-executive directors and executivedirectors.

The Company's Nomination & Remuneration policy which includes the Director'sappointment & remuneration and criteria for determining qualifications positiveattributes independence of the Director & other matters is attached as Annexure-IVto this Report and the same is also available on the website of the Company at thelink www.lexustile.com

COMMITTEES OF THE BOARD

The Board of Directors has constituted four Committees viz.;

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. Corporate Social Responsibility Committee

Details of all the Committees along with their composition terms of reference andmeetings held during the year are provided in Annexure-IX.

Directors Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement your Directors confirm that:

a) In the preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2020 and of the profit ofthe Company for the year ended on that date;

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors have prepared the annual accounts on a 'going concern' basis;

e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

AUDITORS OF THE COMPANY

Statutory Auditors

M/S Ashok Holani & Co. Jaipur (Firm Registration No.:009840C) StatutoryAuditor of the Company hold office for a period of two years from the conclusion of thisAnnual General Meeting till the conclusion of the Annual General Meeting to be held in2022.They have confirmed their eligibility to the effect that their re-appointment ifmade would be within the prescribed limits under the Act and that they are notdisqualified for re-appointment.

As required under the provisions of Section 139 of the Companies Act 2013 the companyhas obtained a written consent and certificate from the above mentioned Auditors to theeffect that they confirm with the limits specified in the said

Therefore being eligible the Board of Directors has appointed M/s Ashok Holani&Co. as Statutory Auditors.

Further in accordance with the Companies Amendment Act 2017 enforced on 7th May2018 by Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every AGM.

Secretarial Auditor

Pursuant to provision of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 (including anystatutory modification(s) or re-enactment(s) thereof for the time being in force) theBoard of Directors had appointed M/s Manisha Godara and associates Company Secretary inPractice New Delhi having Certificate of practice No.: 13570 was Secretarial Auditor ofthe Company appointed to conduct Secretarial Audit of the company for the financial year2019-20.

The Secretarial Audit Report for the financial year ended March 31 2020 is annexed tothis Report. The Secretarial Audit Report does not contain any qualification reservationor adverse remark.

Further in line with the aforesaid compliance the Board of Directors has appointedM/s Manisha Godara and associates Company Secretary in Practice New Delhi for conductingthe Secretarial Audit for the Financial Year 2019-20.

Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act 2013 & the rulesmade there under (including any statutory modification(s) or re-enactment(s) thereof forthe time being in force) the Board of Directors had appointed M/s B A Shah&Associates. Chartered Accountant Rajkot(M.No.:034222) as Internal Auditor toconduct Internal Audit for the financial year 2019-20.

The Internal Audit Report is received half yearly by the Company and the same isreviewed and approved by the Audit Committee and Board of Directors for each half year forthe year 2019-20.

Further in line with the aforesaid compliance the Board of Directors has re-appointedM/s B A Shah & Associates Chartered Accountant Rajkot (M.No.:034222) forconducting the Internal Audit for the Financial Year 2020-21.

COMMENTS ON AUDITORS' REPORT

There are qualifications reservations or adverse remarks made by M/s Ashok Holani&Co. Chartered Accountants Jaipur Statutory Auditors in their report for the FinancialYear ended March 31 2020 except the provisions of Sec 197 read with Schedule V ofCompanies Act 2013. The key audit matters & Comments are given below:

1. Repayment of Dues to Financial Institution /NBFC/Bank: The Company failed to repaycredit facilities availed in accordance with terms of agreement entered with lenders.

2. Adoption of AS-2 (Valuation of Inventories): The Company failed to Comply withaccounting standard -II for valuation of Inventories.

3. (a) According to the information and explanations provided to us and based on therecords of the company examined by us the company is not regular in depositing undisputedstatutory dues including goods and service tax Tax deducted at source Tax collection atsource cess and any other statutory dues to the appropriate authorities. According to theinformation and explanations given to us following undisputed amounts were payable inrespect of the above were in arrears as on 31st March 2020 for a period ofmore than six months from the date on when they become payable.

Nature of Tax Period Amount (In Lakh)
Tax Deducted at Source 2019-20 14.39
Tax collected at Source 2017-18 11.41
Professional Tax 2019-20 1.05
Cess 2017-18 32.22
Excise Duty 2016-17 24.32
Tax Deducted at Source (Demand) 2011-20 42.75
CST under karsamdhan yojna 2011-13 11.54
Total 137.68

(b) According to the information and explanations given to us and based on the recordsof the company examined by us there are no outstanding dues of Income tax or Sales tax orService tax or Duty of Customs or duty of excise or value added tax which should bedeposited on account of any dispute except as mentioned below:

Name of the statute Nature of Dues Period Forum where dispute is pending Outstanding Amount involved (Rs. In Lakh)
Income Tax Act Income Tax 2014-15 CIT (A) 1.84
Income Tax Act Income Tax 2015-16 CIT (A) 65.82
Income Tax Act Income Tax 2016-17 CIT (A) 288.59
Income Tax Act Income Tax 2018-19 CPC 94.17
Grand Total 450.42

4. According to the information and explanations given to us and based on the recordsof the company examined by us the company has made defaults in repayment of loans orborrowing/interest to a financial institution bank Government or dues to debentureholders. Details as follows: -

5.

Particulars Type of Institution Amount of default Period of Default
1. Mas Finance Service Ltd NBFC 5850729 4 month
2. Visu Leasing Finance Private Ltd NBFC 3569543 4 month
3. HDFC Bank Ltd. Bank 523662 3 month
4. AAC SARL Debenture Holders 3987451 6 Months
Grand Total 13931385

The management comments on the auditors report are asunder:-

(a) The Company is in touch with its legal consultants and trying to revolve the demandoutstanding against the company and simultaneously making efforts to pay off the genuinedemands.

(b) The company was in short of funds during the last year as mentioned by us in ourfinancial operations report and management is striving hard to improve the liquidityposition of the company so that these over dues are paid and in future no such thingshappen again as this hamper goodwill of the company.

Observation made by the Auditors are self-explanatory and have been dealt with anIndependent Auditors Report & its annexure forming part of this Annual Report andhence do not require any further clarification. The Statutory Auditors have not reportedany incident of fraud to the Audit Committee of the Company in the year under review.

There are no qualifications reservations adverse remarks or disclaimers made by M/sManisha Godara and Associates Secretarial Auditor in the Secretarial Audit Report.

SECRETARIAL AUDIT

The Secretarial Audit Report for the financial year ended March 31 2020 is annexedherewith marked as Annexure-I to this Report. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.

CORPORATE SOCIAL RESPONSIBILITY

As per the provision of Section 135 of Companies Act 2013 the board is required toconstitute a corporate social responsibility committee of members who will manage the CSRactivities applicable on the company to be undertaken by the company as specified inSchedule VII to the Companies Act 2013 and duly approved by the board as well as fix theamount of expenditure to be incurred on the activitiesand monitor the CSR Policy from timeto time.Our company constituted the CSR Committee for undertaking the CSR activities asper the provisions of Companies Act 2013 and SEBI (LODR) 2015.

However during the year under review FY 19-20 the company has incurred theprofit/(loss) before tax of Rs. (18684284) so as per provision of the section 135 ofCompanies Act 2013 the company is not falling under the criteria for fulfilling the CSRactivities this year. Moreover the total amount pending for spending under CSR for allthe year taken together is Rs. 3159235.02/-.

The company has incurred a sum of Rs. 1.51 lakhs (Rupees One Lakh Fifty-One ThousandOnly) on CSR initiatives in the areas as per the policy of the company. The CSR Reportforming part of this report is furnished in Annexure XI.

RISK MANAGEMENT POLICY

The company operates in conditions where economic; environment and social risk areinherent to its businesses. In managing risk it is the Company's practice to takeadvantage of potential opportunities while managing potential adverse effects. The ListingRegulations required that all listed Companies shall lay down the procedure towards riskassessment. It also requires that the Company must frame implement and monitor the riskmanagement plan of the Company. To overcome this and as per the requirement of Section134(3)(n) of the Companies Act 2013 read with the rules made there under if any Boardhas framed a very comprehensive Risk Management Policy to oversee the mitigation planincluding identification of element of risk for the risk faced by the Company which inthe opinion of the Board may threaten the existence of the Company. The objective of thepolicy is to make an effective risk management system to ensure the longterm viability ofthe Company's business operations.

Although the Company has adopted the policy regarding the assessment of the risk andits updates are provided to the senior management of the Company the process for themitigation of the risk is defined under the risk management policy of the company whichare available for the access on our website www.lexustile.com.

INTERNAL FINANCIAL CONTROLS

The Company has identified and documented all key internal financial controls whichimpact the financial statements. The financial controls are tested for operatingeffectiveness through ongoing monitoring and review process of the management andindependently by the Internal Auditors. In our view the Internal Financial Controlsaffecting the financial statements are adequate and are operating effectively.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The Company was inoperational from 22nd March' 2020 to 24th May2020 due to the lockdown and the emergence of the COVID-19.

Except from the point mentioned above during the financial year 2019-20 there were nomaterial changes and commitments affecting the financial position of the Company haveoccurred between the end of the financial year of the Company to which the financialstatements relate and the date of this Report other than the details given in this boardreport.

DETAILS OF REVISION OF FINANCIAL STATEMENT OR ANNUAL REPORT

No revision of the Financial Statement or Annual Report has been made during FinancialYear 2019-20 for any of the three preceding Financial Years.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.

CORPORATE GOVERNANCE

The Corporate Governance requirements as stipulated under the of SEBI (LODR)Regulations 2015 is not applicable to the company but the Company adheres to goodcorporate practices at all times.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return in Form MGT-9 containing details as on the financial yearended 31st March 2020 as required under Section 92(3) of the Companies Act2013 read with The Companies (Management and Administration) Rules 2014 is annexedherewith as Annexure-II which forms part of this Board report.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED

Company has not given any loan guarantee or provided security in connection with aloan and had not made any investment under the Section 186 of Companies Act 2013.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions that were entered by the Company during theFinancial Year were in Ordinary Course of the Business and on Arm's Length basis.Accordingly the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act 2013 is disclosed in Form AOC-2 in Annexure-III isannexed to this report.

There have been no materially significant related party transactions between theCompany and the Directors the management the subsidiaries or the relatives except forthose disclosed in the financial statements. Accordingly particulars of contracts orarrangements with related parties referred to in Section 188(1) along with thejustification for entering into such contract or arrangement is disclosed in thefinancials.

PARTICULARS OF EMPLOYEES AND RELATED INFORMATION

Pursuant to the amendment in the Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014a detailed statement is attached as Annexure-V.

Apart from that there are no Employees in the Company whose particulars are requiredto be disclosed in accordance with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Amendment Rules 2016 in the report.

HUMAN RESOURCE DEVELOPMENT

The Company recognizes that its employees are its principal assets and that itscontinued growth is dependent upon the ability to attract and retain quality people. TheCompany also recognizes the importance of providing training and development opportunitiesto its people to enhance their skills and experiences which in turn enables the companyto achieve its business objectives. The morale of employees continued to remain highduring the year contributing positively to the progress of the Company. Howeveraspirations of employees in Company remain to be high. This is a challenge as only growthcan fulfil these aspirations and in today's market scenarios one has to performextraordinarily to achieve growth.

The Company has always provided a congenial atmosphere for work to all sections of thesociety. Your Company is committed to respect universal human rights. To that end theCompany practices and seeks to work with business associates who believe and promote thesestandards. The Company is committed to provide equal opportunities at all levels safe andhealthy workplaces and protecting human health and environment. The Company providesopportunities to all its employees to improve their skills and capabilities. The Company'scommitment extends to its neighbouring communities to improve their educational culturaleconomic and social well-being.

Your Company is an equal opportunity employer and does not discriminate on the groundsof race religion nationality ethnic origin colour gender age citizenship sexualorientation marital status or any disability not affecting the functional requirements ofthe position held.

VIGIL MECHANISM & WHISTLE BLOWER

The company has established a Whistle Blower Policy which also incorporates a VigilMechanism in terms of the SEBI (LODR) Regulations 2015 for directors and employeescommensurate to the size and the business of the company to promote ethical behaviouractual or suspected fraud or violation of our code of conduct and ethics. Under the saidmechanism the employees are free to report violations of applicable laws and regulationsand the code of conduct. It also provides for adequate safeguards against thevictimization of persons who use such mechanism.

The Whistle Blower Policy of the Company is also available on the website of thecompany at the link www.lexustile.com

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3)(m) of the Companies Act 2013 read with rule 8(3) of TheCompanies (Accounts) Rules 2014 relevant details of energy conservation technologyabsorption and foreign exchange earnings and outgo are attached as Annexure-VI tothis Report.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Our Company is an equal opportunity provider and believes in providing opportunity andkey positions to women professionals. At the same time it has been an Endeavour of theCompany to support women professionals through a safe healthy and conducive workingenvironment by creating and implementing proper policies to tackle issues relating to safeand proper working conditions for them.

The Company has zero tolerance towards sexual harassment of Women at workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment of Women atWorkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules there under.

The following is the summary of Sexual Harassment Complaints received and disposed offduring the year 2019-20.

a. Number of Complaints of Sexual Harassment at the beginning of the Financial year:NIL

b. Number of Complaints disposed off during the year: NIL

c. Number of Complaints pending as on the end of the Financial year: NIL

d. Nature of action taken by the Company: NA

CODE OF CONDUCT FOR PROHIBITION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with therequirement of the Securities & Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015. The Insider Trading Policy of the Company lays down guidelinesand procedures to be followed and disclosures to be made while dealing with shares of theCompany as well as consequences of disclosures to be made while dealing with shares of theCompany as well as consequences of violation. The Policy has been formulated to regulatemonitor and ensure reporting of deals by employees and to maintain the highest ethicalstandards of dealing in Company's shares.

The Insider Trading Policy of the Company covering the code of practices and proceduresfor fair disclosures of unpublished price sensitive information and code of conduct forthe prevention of Insider Trading is available on the website http://www.lexustile.com

INVESTOR GRIEVANCE REDRESSAL

There was one pending investor complaint as on 31.03.2020. The company is trying hardto resolve it.

POLICIES ADOPTED BY THE COMPANY

Your company has adopted various policies for the smooth working of the company whichare as follows:

CODE OF CONDUCT TO REGULATE MONITIOR AND REPORT TRADING BY INSIDERS

There are many information's that are important and price sensitive and required to bekept confidential on the part of the company if the information is disclosed this willharm the image of the company in the definition of the insider it will include all thepersons connected with the company including the all employee's so policy relating to thisis available on the website of the company.

This policy is applicable to all employee's and KMP's of the company to not to disclosethe confidential information of the company which affects the performance of the company.The policy of the company for the access is available on the website www.lexustile.com

CODE OF CONDUCT OF BOARD OF DIRECTORS & SENIOR MANAGEMENT

Certain code of conduct is required from the senior management including the Board ofDirectors of the Company; they have to be abiding by the rules and laws applicable on thecompany for the good governance and business ethics. It describes their responsibility andaccountability towards the company. Policy of the company relating to this is availablefor the access at the website www.lexustile.com

CORPORATE SOCIAL RESPONSIBILITY

CSR is a broad term describes the company's efforts towards the society this ismandatory under certain terms of Companies Act 2013 but the benefit of this policy is twohanded one hand company get the chance to involve in the social welfare and other handthis will improve the image of the company.

CSR policy creates social awareness among the companies and creates an obligationtowards the society. Policy of the company relating to this is available for the access atthe website www.lexustile.com

FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

Under Familiarization programme all Independent Directors (IDs) inducted into the Boardare given an orientation presentations are made by Executive Directors (EDs) and SeniorManagement giving an overview of our operations to familiarize the new IDs with theCompany's business operations. The new IDs are given an orientation on our products groupstructure and subsidiaries board constitution and procedures matters reserved for theBoard and our major risks and risk management strategy.

This policy includes keeping updated to the independent directors about the working ofthe company and projects in which company is involved various programme are conducted bythe company for the ID's. The Policy on the Company's Familiarization Programme for IDscan be accessed at the website www.lexustile.com

NOMINATION AND REMUNERATION POLICY OF THE COMPANY

Based on the recommendations of the Nomination and Remuneration Committee the Boardhas approved the Remuneration Policy for Directors KMP and all other employees of theCompany. As part of the policy the Company strives to ensure that:

The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;

Relationship between remuneration and performance is clear and meets appropriateperformance benchmarks.

Remuneration to Directors KMP and senior management involves a balance between fixedand incentive pay reflecting short and long-term performance objectives appropriate to theworking of the Company and its goals. Policy relating to the nomination and remunerationof the company is available on the website of the company www.lexustile.com

DETERMINATION OF MATERIALITY OF INFORMATION & EVENTS

From the point of Listed entity investors of the entity of the also expecting more andmore information for the company so under this policy the management of the companydetermines the material events of the company and disclosed them for their investors.

Under this policy company may decide all those events and information which arematerial and important that is compulsory to be disclosed for the investors about thecompany policy related to this is available at the website www.lexustile.com

PRESERVATION OF DOCUMENTS

The Corporate records need to be kept at the places and manner defined under the Actpolicy relating to that for the safe keeping of the documents is available on websitewww.lexustile.com

POLICY ON RELATED PARTY TRANSACTION

The Objective of the Policy is to set out:

(a) The materiality thresholds for related party transactions; and

(b) The manner of dealing with the transactions between the Company and its relatedparties based on the Act your company adopted this policy for dealing with parties in atransparent manner available at the website of the company www.lexustile.com

TERMS AND CONDITIONS FOR APPOINTMENT OF INDEPENDENT DIRECTORS

Independent directors are the key part of the board according to the Schedule IV to theCompanies Act 2013 they are skilled experienced and knowledgeable persons they arerequired on the board to take improved and better decisions policy relating to theappointment will be helpful for the board policy of the company is available at thewebsite www.lexustile.com

ARCHIVAL POLICY

This policy deals with the retention and archival of the corporate record theserecords are prepared by the employees of the company under this policy any materialinformation relating to the company shall be hosted on the website of the company for theinvestors and public and remain there for period of five year. The policy of the companyfor the access is available on the website www.lexustile.com

CODE OF CONDUCT OF INDEPENDENT DIRECTORS

Independent Directors are the persons who are not related with the company in anymanner. A code of conduct is required for them for their unbiased comments regarding theworking of the company. They will follow the code while imparting in any activity of thecompany. The policy deals with the code of conduct of the Independent Directors theirduties and responsibilities towards the company is available at the websitewww.lexustile.com

RISK ASSESSMENT AND MANAGEMENT

Risk is the part of every one's life while running any business many kinds of risksare involved. To minimise the business risk and all the factors that will negativelyeffects the organization every company tries to follows a certain procedure for theforecasting of the risk and its management. Policy relating to this is available on thewebsite www.lexustile.com

WHISTLE BLOWER AND VIGIL MECHANISM

While running the big organization there are certain good and bad things that mayhappen in order to control the fraud misconduct and malpractices. This procedure isadopted by the company and reporting of this procedure is done under the vigil mechanismby adopting this kind of system company can control the unethical acts and practices. Thepolicy relating to this is available at the website www.lexustile.com

PREVENTION OF SEXUAL HARRASSMENT

It has been an Endeavour of the Company to support women professionals through a safehealthy and conducive working environment by creating and implementing proper policies totackle issues relating to safe and proper working conditions for them. The Company haspolicy against sexual harassment.

GENERAL

During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.

All the material changes commitments affecting the financial position of your Companybetween the end of financial year (March 31 2020) and the date of report (August 252020) has been mentioned in the board report.

CHANGE IN THE NAME OF THE COMPANY

During the financial year there has been no change in the name of the Company.

CFO CERTIFICATION

The company has obtained Compliance Certificate from Mr. Dilipbhai N Fultariya ChiefFinancial Officer of the company pursuant to Regulation 17(8) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 for the financial year 2019-20was placed before the Board of Directors of the Company and is attached as Annexure-X tothis Report.

DECLARATION AFFIRMING COMPLIANCE WITH CODE OF CONDUCT

I hereby confirm and declare that all the Board Members and Senior Management Personnelhave individually affirmed compliance with the Code of Conduct adopted by the Company forthe Financial Year ended 31st March 2020 being attached to this report as Annexure-XII

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for assistance and co-operationreceived from the Bankers Central & State Government Local Authorities ClientsVendors Advisors Consultants and Associates at all levels for their continued guidanceand support. Your Directors also wish to place on record their deep sense of appreciationfor their commitment dedication and hard work put in by every member of the Company.

For and on behalf of the Board of Directors

Sd/-ANIL KUMAR BABULAL DETROJA
(MANGAING DIRECTOR)
Place: Morbi
Date: August 25 2020